Terms plans are the most ignored yet most important life insurance policies. These are mostly unpopular since they only carry death benefit and will not generate returns over years of investment. However, term insurance should be on the portfolio of everyone, especially those who are the sole bread winners in the family. Want to know why? Then this article is for you! We will summarize the need for term insurance and will also give few online term plans. So, read on!
What is term insurance and why should you opt for one?
Term insurance is basically a type of life insurance which has a clause for death benefit only i.e. the nominee of the policy holder will get sum assured only if the death of the policyholder occurs during the policy period.
This would mean that no survival benefit is granted for the policyholders under term insurance policies. However, term policies are very cost effective way to build up safe future for your loved ones who are financially dependent on you.
Online term insurance plans have something more over and above these benefits, which are:
- Convenience to opt for the same sitting at comfort of sitting at home or office
- Reasonable premium due to absence of intermediaries or brokers
- No coercion or forcing by the agents
- Discount will be offered to encourage online direct purchase of term insurance which will further reduce your cost of purchase or premium.
How we arrived at best plans?
- Claim settlement ratio :- This number will reflect how many claims have been disbursed as against total claims filed by the applicant or their nominees. This figure will reflect the trustworthiness or credibility in the sense that the more claims settled, more reliable the company is. However, this figure can be just collection of raw data since the insurance company will accumulate all types of insurance products for calculating this ratio. So, additional perimeters are to be combined for better selection.
- Reputation :- Insurance companies which are quite older and well settled in the market are preferred since well reputed insurance companies will seldom go down. FICO score is essential checkpoint for ensuring better stability.
- Premium :- Since the term insurance does not generate returns over investment and still makes up huge investment (as term period is higher like 15-20 years), it is necessary to choose a reasonable term insurance. However, If you start early, there is always cheaper premiums for comparatively higher sum assured.
- Additional riders or features :- This always seems like convenient where you can get survival benefit or get health insurance rider etc. But always keep in mind that such plans are expensive than the plain vanilla term insurance policies.